This module provides filters at the top of the Permissions page for easier management when your site has a large amount of roles and/or permissions. The module was originally created because the excessive amount of checkboxes combined with some jquery activity was causing "Unresponsive Script" js errors on every load and save of the permissions page.
This has the potential to help if your permissions grid is too large to be saved due to the PHP max input setting as described: http://2bits.com/drupal/drupal-not-saving-admin-pages-large-number-input... but you should not rely on this as this module does nothing to prevent you from displaying all roles and permissions if desired which would result in this same problem.
This can also be handy when combined with checkbox browser plugins such as the Firefox plugin, Checkfox. By combining module and role filtering and then being able to simply highlight the entire page of checkboxes, right click, and then "check" or "uncheck" you can seriously cut down on frustration doing bulk permission changes.
The nice folks over at gotdrupal.com put together a video which demonstrates this module as well as a few other utility modules for managing permissions, you can check it out here: http://gotdrupal.com/videos/manage-drupal-permissions-more-easily
If you aren't having performance issues due to massive permissions/roles and want a nice filtering solution that works entirely client side, Fast Permissions Administration is a slick module that has a different approach than Filter Permissions but will give similar benefits.